Xinyuan Enterprise Group (01748) announced that on December 15, 2023, charterer Bauhinia Star Shipping (Hong Kong) (an indirect wholly-owned subsidiary of the company): entered into a memorandum of agreement with the owner, the owner agreed to buy and the charterer agreed to sell the ship, subject to the terms and conditions therein; and concluded a bareboat leasing agreement with the owner for bareboat leasing ships. According to the bareboat leasing agreement, the charterer leases the ship back to the owner and has the right to purchase the ship, and can buy the ship from the owner, and if the right to purchase is not exercised, the charterer assumes the purchasing responsibility of purchasing the ship from the owner at the end of the charter period, subject to the conditions contained therein.
The ship (Baustella (IMO number 9812133)) is an asphalt ship/tanker with a total tonnage of 7293 built in 2018. As of December 31, 2022, the ship's net asset book value was approximately $15.4 million.
The conclusion of a memorandum of agreement and bareboat leasing agreement is a sale-and-leasing arrangement for the ships concerned. The company believes that since the Group can obtain additional working capital while maintaining an appropriate interest in the ships, it will also enhance the Group's cash flow, so the relevant arrangements are beneficial to the Group.